Collapse of UK's Utility Link marks fifth small supplier failure

London (Platts)--18Jan2006

UK electricity supplier Utility Link has collapsed, according to a 
statement on the website of energy regulator Ofgem. This is the fifth small 
electricity or gas supplier to fail during the past couple of months of 
soaring wholesale energy prices. Smaller companies do not always have the 
financial resources to last through a few difficult months.
     Ofgem said that it was withdrawing Utility Link's electricity supply 
license because it had been informed in the afternoon of Jan 17 that Utility 
Link was unable to meet its debts and that a receiver had been appointed.
     Utility Link acted as an electricity supplier on behalf of third parties 
who wanted to sell their customers electricity as well as whatever products 
and services they were previously supplying their customers with. Chippenham-
based Utility Link had a turnover of around GBP10-mil/year ($18-mil/year) and 
employed around 40 people. Some of the third parties on whose behalf Utility 
Link acted may take action to transfer their customers to another supplier, 
meaning Ofgem may not need to find a supplier of last resort for all of the 
customers concerned.
     Since gas prices soared in late November, hitting at one point 170p/th, 
and driving power prices up with them, five suppliers, including Utility Link,
have failed. Harrogate-based Team Group collapsed, as did suppliers Eledor and
Reepham. Ofgem appointed suppliers of last resort for those companies. EDF 
Energy bought Utilita's customers in a private deal after Utilita ran into 
troubles, but Ofgem did not get involved there. It is not just small suppliers
that have had difficulties. Centrica says that its British Gas residential 
supply arm will report a loss for the second half of 2005.

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.